Buying is golden. Black Gold is rising being driven by the more traditional yellow gold as it surges above $1000 an ounce for the first time since February. The mellow yellow move is raising inflationary caution flags and is dragging up oil and other commodities as well... As much as oil likes to act as a strategic investment at times gold seems to be the shining commodity of the moment. Strong seasonal gold demand in India as well as a weak dollar has gold soaring help along by china and some big mining plays. Dow Jones reports that Goldman Sachs is pimping up China metal demand expectations by saying that Chinese metals demand will remain 'robust in 2009 and 201. The reason they say is the China's government's pro-growth policy and an expanding supply of loan capital.
The move in metals has oil reluctantly rallying higher. Normally the oil would be worrying about the upcoming OPEC meeting as opposed to worrying about the gold market yet the yellow metals surges it is garnering all the attention. Is the move in metals just seasonal buying or is it saying something more ominous about future inflation expectations. Is it fear about another proverbial shoe dropping in the banking sector or some other economic calamity? Gold is heading towards new highs and while it is supporting oil black gold is a long way from its all time highs...
Of course OPEC loves all of this. Life is good in the OPEC cartel. Why invite non OPEC members to the party in Vienna when all the global circumstances are going your way. It is high-five time for OPEC as they are thrilled with the state of the global oil market. Things are so good right now they are amazed at their own success. OPEC has the price of oil in a sweet spot where they can make money and not get criticized by the global community for jacking up prices. It does not get better than that. Oh sure they can complain about member c compliance yet at the end of the day to have oil trading just below $70 a barrel after the great financial crisis in generations OPEC will just being doing a victory lap. Of Course they should be Thanking Ben Bernanke and the rest of the globes central bankers who swift action saved the greedy cartel from stupid post cris moves.
Fred is a new Tropical storm in the Atlantic. At this time Fred does not look like it is going to be a threat to the Gulf or anywhere else for that matter.
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Sell October crude apprx 7090 - stop 7220.
We're short October heating oil from apprx 19000 - lower stop to 17850!
Sell October RBOB at 18510 - stop 18930.
Sold October natural gas apprx 270 - stop 310.
Senoir Market Analyst